Construction phase services
In short
Work that executes and completes the modification. Never excluded by the design phase provision, and the category most disputed items belong to.
In full
Construction phase services are services for the execution and completion of any modification. A.R.S. § 42-5075(O) excludes design phase services and professional services from the prime contracting tax base and states expressly that the subsection does not include construction phase services.
The category is broad and the statute lists it at (O)(1) rather than leaving it to inference. It covers administration or supervision of modification work, including team management and coordination, scheduling, cost controls, submittal process management, field management, the safety program, the close-out process and warranty period services.
It also covers administration or supervision of work performed under a punch list, under change orders and under change directives; inspection to determine substantial or final completion; preparation of manuals, warranties, as-built drawings and spares the contractor must furnish; status reports after work has begun, including master schedule updates, cash flow projection updates, site reports, and identification of discrepancies or health and safety issues; daily logs including personnel and weather; submittals and shop drawings; and administration of anything else for which the contractor receives a certificate for payment based on progress.
Several of those items look like design work and are not. Preparing an initial schedule is a design phase service; updating the master schedule after work has begun is a construction phase service. Preliminary cost estimates before the final design are design phase; cost controls during execution are construction phase.
The dividing question is not the nature of the document but whether the work develops the design or executes it. A firm doing both writes the separation into the contract before starting, or loses it.
A.R.S. § 42-5075(O), (O)(1)